It Is a Confounding Reality That Stock Prices Revert to the Mean
People don’t question that this is so. Even confirmed Buy-and-Holders do not question it. They should. If they accept that reversion to the mean exists, then they should accept that market timing is required. The one thing follows from the other. Do Stock Prices Revert To The Mean?The widespread belief that stock prices revert to the mean is not intuitive. Most people believe that the market sets stock prices through a rational process, that all of the economic developments of the day are taken into consideration by millions of investors and that prices are recalibrated and set in their new pr...